Pana­sonic joins trend of reshoring out of na­tion

China Daily (Canada) - - FRONT PAGE - ByWANG ZHUO­QIONG wangzhuo­qiong@ chi­nadaily.com.cn

Pana­sonic Corp plans to trans­fer most of its do­mes­tic ap­pli­ance pro­duc­tion in China back to Ja­pan start­ing in the spring, a re­sponse to the weaker yen and a jump in la­bor costs in China.

It is one of sev­eral Ja­pan­based com­pa­nies mak­ing such a move.

Pana­sonic Pres­i­dent Kazuhiro Tsuga said in an in­ter­viewonTues­day, ac­cord­ing to Ky­o­doNews, that the company will move its wash­ing ma­chine and other home ap­pli­ance pro­duc­tion back to Ja­pan and ex­port prod­ucts that are made in Ja­pan to other mar­kets.

Pana­sonic plans to ex­port about 40 types of home ap­pli­ances made do­mes­ti­cally to Asian mar­kets.

Tsuga did not re­veal the lo­ca­tion of the reshored fac­to­ries. But mi­crowave ovens and top-load­ing wash­ing ma­chines, which are almost all­madeinChi­nanow, will be the first prod­ucts for which pro­duc­tion is re­sumed in Ja­pan at fac­to­ries in Shizuoka pre­fec­ture and Kobe, re­spec­tively.

Pana­sonic said that a 1 yen drop against the dol­lar re­duces profit by about 1.8 bil­lion yen ($15.1 mil­lion) on an an­nual ba­sis. If the yen sta­bi­lizes at 120 to the dol­lar, this will cause a sig­nif­i­cant de­crease in profit even if the company cuts back on costs, ac­cord­ing to the Yomi­uri Shim­bun.

Pana­sonic China’s pub­lic re­la­tions of­fice said it had not heard of such plans or de­ci­sions, and it de­clined to com­ment fur­ther.

It would be the

first such large-scale reshoring of the company’s for­eign pro­duc­tion. After 35 years op­er­at­ing in China, Pana­sonic has three plants in Hangzhou, Guangzhou and Shang­hai.

Ris­ing la­bor costs in China are also driv­ing the re­lo­ca­tion of Ja­panese fac­to­ries, said Su Liang, brand­ing di­rec­tor of the China Home Ap­pli­ance Re­search In­sti­tute.

He said the short­age of se­nior skilled work­ers at home ap­pli­ance plants has pushed up their salaries and thus in­creased em­ploy­ers’ costs.

Sharp Corp also plans to reshore over­seas TV pro­duc­tion, and Daikin In­dus­tries Ltd has moved part of its air con­di­tioner pro­duc­tion from China to Ja­pan.

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